tv Nightly Business Report PBS February 24, 2011 7:00pm-7:30pm PST
>> susie: oil prices surge then tumble as tensions mount in the middle east, and consumers are experiencing sticker shock at the pump. >> it's a surprise every time you stop at a gas station. >> now it takes me $55, $60 to fill up and before it was $45, max, to fill up my car. >> tom: a look at whether higher prices at the pump will have americans holding on to their wallets. you're watching "nightly business report" for thursday, february 24. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> tom: good evening and thanks for joining us. president obama said today he's confident about u.s. oil supplies, despite the upheavals in libya. susie, some lawmakers called on the president to tap into america's emergency oil supply to offset potential shortages. but president obama said he believes we'll be able "to ride out the situation." >> susie: tom, those comments late this afternoon reassured oil traders and then the price of oil dropped dramatically in the last hour of trading. april crude futures fell $0.82, closing at $97.28. they had been trading as high as $103 earlier in the day. >> tom: but despite that pullback, economists still worry
high oil prices are a threat to the u.s. economy, forcing consumers to cut back on spending. erika miller reports. >> reporter: a penny or two might not seem like a lot, but even a small increase in a gallon of gas, week after week, gets noticed by drivers. >> now it probably takes me $55, $60 to fill up and before it was maybe $45, max, to fill up my car. but it goes up, what can you do? >> reporter: according to one estimate, just a one-cent increase in the price of a gallon of gasoline that lasts a year takes nearly $1.5 billion out of the u.s. economy. that's not just because higher prices force consumers to cut back spending in other areas. as economist david wyss points out, rising energy costs make almost everything more expensive. >> you get an impact on the whole transportation industry. food prices are going to go up because cost of transportation is higher. if you use heating oil, the price of heating your house is going to go up.
>> reporter: the last time crude prices hit these levels was july 2008, and in the following three months retail prices rose sharply. that increase forced many people to slash spending. economist michael gapen worries the same thing could happen this time if gas continues to shoot higher. >> it raises a lot of uncertainty. it injects uncertainty into decision-making by both households and businesses. and it's that type of really sharp rise in oil that causes a change in expectations-- a change in confidence-- and alters spending behavior. >> reporter: nationwide, gas prices are averaging around $3.23 a gallon, up 50 cents in about five months. but that could look cheap if crude hits $200 a barrel. some experts say that's not out of the question. >> $200 dollars is astronomical. it's well above anything we've seen. you'd probably be looking at gasoline approaching $6 a gallon at that point. >> reporter: a rise of that magnitude would be unprecedented.
analysts worry $4 gasoline could tip the economy back into recession, so $6 would certainly mean serious trouble. erika miller, "nightly business report," new york. >> susie: on top of worries about surging oil prices, president obama was focused on jobs today. he met with business and labor leaders at the white house to brainstorm on ways to create more jobs for american workers. the president is counting on general electric c.e.o. jeff immelt to lead the effort. immetlt was recently tapped to head up the president's new jobs and competitiveness council. darren gersh spoke with immelt after that white house meeting and asked him how soon we'll see action. >> what you are goinging to see is a range of different things we do over the next 90 days that would include things like putting a big focus on energy efficiency and creating shoringt term jobs and the construction industry, all the way to what are the programs going to be required to increase
the number of engineers. and you'll see probably four or five initiatives. >> the he talks a lot about technology but a lot of the people lost their jobs, like you said are in construction, autoworkers, so are they going to be able to find these new high-tech jobs. >> there is going to be have to be a massive retainin retaining-- retraining effort that goes on and businesses committed to doing that in concert with community colleges and things like that but there is going to have to be some retraining that goes on. because i'm not putting the death nail on the construction industry but it probably is unlikely that all those jobs come back. so training is going to have to be a key part. what we have done, is sheer are short term tactical things that are ra practical, let's go. what will take more than 18 months. let's make sure we put the groundwork in place. there is no easy button for this stuff but we've got to be going after it. >> you said massive retraining. define nassive. >> people going-- construction worker that can go back and learn
how to be a welder so it's something that can be done in six months or a year in a community college so it's not undoable but it's just going to take different trades. and it is very important that we invest in education for trades in the country because that's another form of competitiveness. >> now a lot has been made about how many people have been unemployed for a long time. about half of the workers have been unemployed have been unemployed for lon long-- longer than six months. >> what can be done for those folks. >> we are trying to look, what's close to the rim that maybe you can push over. there has been a lot of commentary around commercial buildings, retrofits. that's probably a couple hundred thousand jobs right there that the programs in place. it's just a question of getting better financing, better communication had. there is going to have to be short term things like that and beyond that is just businesses investing more, retiring workers. we had a lot of examples today of c.e.o.s that are start to staff up and that will suck back some of the lax as well. >> now you know people said
this is all about scoring political points. what dow say to them? >> look, i run ge, you know, in other words, i don't have to do this. i am only doing it because i think we can make a difference. and so i would remember let-- rather let the president and republicans and people fight it out on their own. i think there is a way for business to be a constructive voice whether it's a democratic administration or republican administration. and i think the president's reached out and look i would like to see more jobs and i'm an american. i would like to see more jobs in america. there is no reason why i can't try to help with that, right? >> well, you also have 79 billion on your books, right n cash. >> yeah. >> are you going to use some of that. >> some of that is on our financial services balance sheet and stuff like that. but look we are going to hire more feel this year than we did last. we'll be adding more than 10,000 jobs in u.s. and you know, a lot will go with that. >> have to ask you about libya and the oil prices and what is going on. how is that affecting your
business, what do you think is going to happen. >> there's still a lot of slack in the environment. so that i don't inflation is to the going to be instantaneous. i think having lived through the financial crisis, greece last summer, things like that, people now have to just take a deep breath on some of these things and say look this is incredible what has happened. but there is a likelihood that in two or three weeks oil prices are back down and there is some form of new government in these regions. so i think some of it is just, is a concern and you have to look at it but some of it is just relive in a more volatile world today. people have to learn how to count to 10 occasionally as you go through this. jeff immelt, head of the president's council and competitiveness. thank you. >> nice seeing you again. >> tom: here are the stories in tonight's n.b.r. newswheel: stocks end mixed on a late-day market comeback.
the dow closed off just 37 points, the nasdaq added 14 and the s&p 500 fell a point. trading volume: 1.2 billion shares moved on the big board, 2.1 billion on the nasdaq. some improvement on the jobs front today, new claims for jobless benefits dropped last week, down 22,000 thousand to 391,000. new home sales, though, headed to the basement last month thankso high unemployment and a glut of foreclosures. january sales fell 12.6%, reversing december's gain. u.s. food prices could spike as much as 3.5% this year, with most of the jump coming in the second half of the year. the agriculture department says that's about how long it will take for higher commodity prices to work through to consumers. still ahead, if you build it will they charge? that's the question in rhode island for electric car stations. we'll explain in tonight's "planet forward" segment. >> susie: a $35 billion win late today for boeing. the aerospace giant won a long- delayed pentagon contract to
build 179 new aerial refueling tankers for the air force. airbus parent e.a.d.s. was edged out. now boeing shares rocketed higher on the news, up 5% in after-hours trading around to $74 a share. the air force originally planned to lease the planes from boeing, but that fell apart after it was found laws were broken during the bidding process. today's loser, airbus, has ten days to appeal. otherwise, boeing will start building the tankers. >> tom: toyota's still being dogged by floor mat and accelerator problems. today it recalled another 2.1 million vehicles. that's on top of the 8.5 million vehicles recalled globally since november of 2009. the issue? floor mats that could get stuck under gas pedals, causing sudden acceleration. you can check your toyota on the company's website, toyota.com/recall.
>> the technology stocks with the nasdaq finding some gains after two days of selling pressure. let's get you cup dated in tonight's market focus >> tom: a mixed end to a choppy day for the major stock indices. let's start with the day for the s&p 500. just before 2 p.m. eastern, the index reversed the selling. as brent crude oil prices gave
up earlier gains, u.s. stocks found buyers. now increasingly, brent crude is really the benchmark for oil prices, not the u.s. west texas oil contract. here are the past five sessions of trading in brent. continuing to climb. prices almost hit $120 a barrel before backing down today, helping out stocks. now the price difference between these two types of oil, $97 light sweet in new york versus $111 north sea crude, has gotten the attention of the u.s. energy department, calling it unusual in its scope and duration. the price difference continues putting refinery stocks under pressure. in fact, the energy sector was the biggest loser today. tesoro is now down more than 10% of from this high last week.
fellow refiner sunoco fell 4%. the market is worried about these refiners seeing oil prices rise faster than pump prices. consumer stocks were rising, helped out by retailer target. shares jumped a nice 3.5% after hitting a seven-month low yesterday. it is plans to double earnings within seven years. it's clearly finding buyers. meantime, archrival walmart continued sinking. this is the past 90 sessions. how about this? since its january high, walmart has fallen 9.5%. a strong quarter at kohl's and its first stock dividend had the stock up 3%. procter and gable fell almost 2%. it plans to raise prices to combat rising commodity costs. sears fell 5% after a disappointing quarter and a warning that poor results may continue. after the close tonight, a.i.g. turned in a narrower-than- expected loss.
that's good news. the firm says its continuing businesses are stabilizing and strengthening. a.i.g. shares were up 1% during the regular session and added about 2% after the close. the drop in january came when the federal government announced plans to start unloading its stock beginning next month. now speaking of the government ownership, general motors is at its lowest level since its initial offering in november. if taxpayers are to make any money from selling their interest in g.m., the stock has to be above $53 per share. its first results since returning as a public company were hit by a charge to buy back stock from uncle sam. but g.m. posted its first full- year profit since 2004. three other movers. gold miner newmont fell 7% after forecasting lower production this year. salix pharmaceutials lost almost a quarter of its value over worries its irritable bowel syndrome medicine may not get approval. and watch salesforce.com tomorrow. after the close shares were up 7% from this close on strong earnings.
focus." and that's tonight's "market focus." innovation is a driver of business, and sometimes one innovation drives another. take, for example, the electric car. new models are just now hitting the streets. but if you drive one, where do you charge it up? the answer can be found in our partnership with "planet forward," the george washington university social media project using your ideas to power our
future. frank sesno reports. >> reporter: okay, so we know a little about electric cars. thanks, in part, to "planet forward" innovator dan gray, we drove a nissan leaf last fall. pretty cool. but, can this innovation, zero- emissions driving, go anywhere if there's no place to charge it away from home? it's a chicken-and-egg problem. no place to charge, no reason to buy electric; no electric cars, no reason to build places to charge. sounds like time for a new innovation. "planet forward" member zachary heir recently posted this video of a program with a if-you- build-it-they-will-come approach to the plug-in problem. >> rhode island's electric vehicle advocates are providing an example of how citizens can take charge. >> reporter: taking charge. that's exactly what innovator al dahlberg is doing. the soft-spoken father of two is not a car geek, but totally driven by the idea that we can't sit back and wait-- we need to do differently. a former e.p.a. and u.s. senate staffer, dahlberg is leading
"project get-ready, rhode island." the innovation here? bringing together a unique and determined coalition of interests to start getting e.v. infrastructure built. as a start, dahlberg recruited a local business-- a leading furniture chain-- to pay for and install the state's first public charging station. >> it's important that a private company put in this first charge spot, because it shows corporate leadership and it will hopefully encourage other companies to put in a charge spot as well. >> reporter: rhode island is one of twenty "project get ready" pilot programs nationwide. it has gotten diverse groups, including businesses, utilities, and environmental advocates, into what you might call a carpool. all agree on their destination: 2% of registered vehicles-- 10,000 cars-- to be plug-ins within five years. dahlberg says corporations are now turning to his group for e.v. consultation. >> we've been able to bring all these resources to advise companies and government on the possible solution on plug-in
electrical vehicles. >> reporter: a dozen companies have pledged to install charging stations by the end of the year. but here's what dahlberg and his fellow e.v. stargazers are up against: nobody really knows how many charging stations would be needed to support 10,000 cars in the state. the president wants a million e.v.s nationwide in just four years. installing a public fast-charger would cost over $60,000. and, governments aren't exactly super-charged with money these days. dahlberg sees it this way. >> it's unusual that you have environmentalists and automakers working hand-in-hand together preparing a community for a new product launch, but that's exactly what we have to do. we have to get people comfortable with this technology. "planet forward" member jim pierobeon adds his idea to the discussion. >> what seems to be lacking, he says, is a clearinghouse for e.v. infrastructure developments that is updated weekly. that way people can really keep up-to-date on changing developments.
>> tom: "planet forward"'s frank sesno joins us from our d.c. bureau. frank, you just mentioned in that report a fast public charger at $60,000. what about the cost of the one that you featured at the furniture store with the project get ready in rhode island. >> the pure charge just for that is up 3 grand so the business picked that out. but there is a lot of development in front end costs that go into that as well. so there is that sort of establishing charge, that you know, get ready, get set, go charge which is buried. still this is a pretty expensive undertaking. >> what about the power itself. who pays for the power assuming an ev comes in and plugs in. >> right now it's free. down the line, we will swipe a card, a credit card in front of that and you could be charged. so a clever business could say we'll make some money out of this. we'll sell the power while they're shopping inside. others may use it as a loss leader. you can imagine a big box chain that says charge up for free or at cost or whatever.
while you are shopping. so there are some potential business advantages to it. >> you mentioned business advantage is there a working business model yet? clearly a lot of unknowns still. how manitations it will take for that 10,000 cars in rhode island but is there a working mod snell. >> not really. when i was talking to al about this standing out in the snow by the charge point they've got there, how many of these are you going to need. well that is kind of the problem. we don't really know how many charge points away from home you need. because they figure that most people will charge up at home. now that being said, there are these pirate programs across the country, tucson, for example, has put in about a hundred charge points. long before they've got cars to plug them in. so in the chicken and egg thing, tom, we've got chicken-- with scrambled eggs going on right now. >> and trying to find the ac and dc together to put it on the road here. frank we do want to mention that you are holding a web chat on-line tomorrow. at planet forward.org. it's noon eastern time and you can find a link on our
web site on nbr-on-pbs.org. always nice to kauch. great work, looking forward to continuing the project. our guest frank sesno, he runs planet forward. >> thanks, tom. >> susie: here's what we're watching for tomorrow: two key economic reports: the latest revision to fourth- quarter g.d.p. numbers and the final february reading on consumer sentiment from reuters and the university of michigan. also tomorrow, "market monitor" guest marshall front on the investment implications of rising oil prices. he's chief investment officer at front barnett associates. the walt disney company is looking to spread a little togetherness, so it's bought the children's social network togetherville. the site is aimed at kids aged 6 to 10 as a place to play games, see videos, even send messages to their friends. this is disney's third purchase of an established social networking site, after buying playdom and tapulous last year. >> tom: the i.r.s. is giving
taxpayers a bit of a break. the agency is changing how it goes after people who owe money, doubling the size of the tax bill that will trigger a lien. the new amount is $10,000, up from $5,000. the i.r.s. has come under fire for hounding taxpayers, especially in cases where the recession left them with little or no money to pay tax bills.
>> susie: when it comes to the spending fight on capitol hill, tonight's commentator thinks the way lawmakers fight is a recipe for disaster. she's maya macguineas, director of the fiscal policy program at the new america foundation. >> the hot topic in washington is whether there will be a government shutdown. they discuss it on sunday shows; hedge funds are trying to gauge the odds. my personal belief is that it's more likely than not. and so i wondered, "is this a model that could work in other businesses as well?" assume a bakery. we take the staff, divide them into two teams-- those who like one cup of sugar, and those who like two-- who are both supposed to make the donuts and discredit each other in the process. the make their respective cases for more or less sugar, but don't really listen to each
other. they try to sabotage each other when baking, adding more sugar or dumping it out. things deteriorate into an outright food fight. they can't agree, no donuts are made and they have to shut down the whole operation. brilliant. honestly, what are these guys on capitol hill thinking? this thought experiment is leading to my next investigation: who is more mature, congress or junior high schoolers? i fear we all know the answer. i'm maya macguineas. >> tom: and finally, nasa's most traveled space shuttle is racking up its last set of frequent flyer miles tonight. "discovery" took off from the kennedy space center late this afternoon on its last trip into orbit. there it goes. nasa is mothballing the shuttle fleet this summer, and private companies will take over space travel. now on this trip, "discovery" and its six-astronaut crew will spend 11 days in orbit and log 4.5 million miles. and susie, that's on top of the
352 days and 143 million miles this shuttle has already spent in space. >> susie: so how much longer do you think it's going to be, tom, before we talk about spring break in space? >> tom: on the moon, right, yeah, spring break on the moon. that is nightly business report for this thursday, february 24th. thanks for joining us, i'm tom hudson. have a great night. and you too, susie. >> susie: same to you, tom. i'm susie gharib. thanks for watching. hope to see you all again right here tomorrow night. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you.